Egan-Jones Ratings Company and its president Sean Egan will be barred for at least 18 months from rating asset-backed and government securities issuers as a Nationally Recognized Statistical Rating Organization (NRSRO).
The penalty comes as a result of the EJR and Egan settlement with the U.S. Securities and Exchange Commission over charges that the company falsely stated in its 2012 registration application to become a Nationally Recognized Statistical Rating Organization (NRSRO), that it rated issuers of asset-backed and government securities since 1995.
EJR and Egan also agreed to correct the deficiencies found by SEC examiners in 2012, and submit a report – signed by Egan under penalty of perjury — detailing steps the firm has taken.
“Accuracy and transparency in the registration process are essential to the Commission’s oversight of credit rating agencies,” said Robert Khuzami, director of the SEC’s division of enforcement in a press release today. “EJR and Egan’s misrepresentation of the firm’s actual experience rating issuers of asset-backed and government securities is a serious violation that undercuts the integrity of the SEC’s NRSRO registration process.”
